July Construction Insolvencies Up on Previous Year

CONSTRUCTION FIRMS accounted for 15.8% of all insolvencies in England and Wales in July 2024, with 339 registered construction businesses becoming insolvent.

This is according to the latest data from the Insolvency Service.

In the year to July 2024, a total of 4,373 construction firms became insolvent. This was a 4% increase on the 4,205 insolvencies recorded in the year to July 2023, and a 35.9% increase on the 3,218 in pre-pandemic 2019.

July Insolvencies Up

Of all cases where the industry was captured in the statistics, construction insolvencies remained the highest in the year to July 2024.

The Insolvency Service said while the insolvency rate has increased since the lows seen in 2020 and 2021, it remains much lower than the peak of 113.1 per 10,000 companies seen during the 2008-09 recession. This is because the number of companies on the effective register has more than doubled over this period. The overall rate between 1 September 2023 and 31 August 2024 was 55.5 per 10,000 companies.

The statistics come as news of the demise of construction giant ISG sent shockwaves through the industry this week. Beyond concerns for the directly affected workforce and what it means for existing projects, the Building Cost Information Service (BCIS) says there will be ‘serious consequences’ for many of the firms in ISG’s supply chain.

Six subsidiaries of ISG entered into administration on 20 September, which means, if they do, they won’t enter into official insolvency statistics for some time.

Scotland Insolvencies

In Scotland, there were 16 construction company insolvencies in August 2024, accounting for 15.7% of all insolvencies in the country. This was eight fewer than in July 2024, and four fewer than in August 2023.

The total for the 12-month period up to August 2024 was 205, which was a 6.8% decrease on the 220 insolvencies in the year to August 2023, and a 1% decrease on the 207 in pre-pandemic 2019.

By rough comparison, in 2023 construction firms accounted for 13.8% of all registered businesses in the UK, suggesting the industry is still disproportionately affected by insolvency.

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